A judicial panel’s decision earlier this month in an ongoing legal battle between the cities of Atlanta and Sandy Springs over water service means Atlanta could lose some of the funds it relies on for sewer system upgrades.

The 11th U.S. Circuit Court of Appeals in Atlanta on Nov. 19 overturned a federal judge’s ruling that prohibited Sandy Springs from engaging in mediation in state court.

The decision by Judges Ed Carnes, Phyllis A. Kravitch and Jerome Ferris gives Sandy Springs more leeway over the quality and price of its water service from Atlanta, said Sandy Springs City Attorney Wendell Willard.

“I feel very good about it,” Willard said. “It is now allowing us to have some say-so in regards to pricing and delivery of water to the residents of the city of Sandy Springs. We can start a dialogue for negotiations with the city of Atlanta on these points.”

In a statement, Atlanta City Attorney Cathy Hampton said, “The city of Atlanta remains confident that it will prevail on the substance of all claims in state court.”

Roger Bhandari, Atlanta’s deputy city attorney for the watershed management legal team, said Friday the city had no further comment on the case because it is ongoing.

An October 2005 agreement designated Atlanta as the direct retail water service supplier for all of unincorporated Fulton County, including unincorporated Sandy Springs. Two months later, Sandy Springs officially became a city, activating a provision in Georgia law to allow new cities to amend service delivery agreements with other counties or cities. The revisions sought by Sandy Springs to the service contract could decrease the amount or price of water it buys from Atlanta.

The Nov. 19 ruling means, if a decision is made to reduce the rates Sandy Springs is currently paying for its water, Atlanta may have to find ways to make up for the potential lost revenue. The city already has some of the highest water and sewer rates in the country, and Mayor Kasim Reed has said he does not plan to raise them.

The ruling could have less impact on Atlanta’s ability to pay for its mandatory sewer upgrades due to a September decision by U.S. District Judge Thomas Thrash. He allowed Atlanta to delay its deadlines on some remaining work until 2027, giving it 13 years of leeway.

The city had until July 1, 2014 to finish construction projects to avert sewage spills. Atlanta’s request for more time was proposed as a way to decrease the pressure on ratepayers and the city’s budget. Atlanta is ordered to comply with court-approved consent decrees to upgrade its sewer system.

The decrees come from a Clean Water Act lawsuit filed against the city in 1995, following repeated sewage spills contaminating the Chattahoochee River and its tributaries. Thrash has since been overseeing requirements that Atlanta prevent sewage spills.

The dispute between Atlanta and Sandy Springs goes back to October 2009, when negotiations over water service delivery stopped. Then Sandy Springs filed a petition in Fulton County Superior Court, referring to a state law requiring mandatory mediation to resolve water service disagreements between local governments.

Atlanta responded by asking Thrash to bar Sandy Springs from pursing the state court mediation. Thrash granted Atlanta’s request and Sandy Springs appealed, arguing he had overstepped his bounds.

The 11th U.S. Circuit sided with Sandy Springs, stating Thrash was motivated by the fear the state court actions could hinder Atlanta’s efforts to comply with its requirements because its water revenue is promised as part of collateral for bonds the city issued to finance its upgrades.

Willard said he could not comment further on the case, but added it now will go before DeKalb County Superior Court Judge Linda Hunter. No court dates have been set yet, Willard said.

*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, spam, and links to outside websites will also be rejected. Please read our terms of service for full guides